Research About Financing Of SMEs Clusters Based On Social Capital

Small and medium enterprises(SMEs),playing an important role in China’s economic and social development, has been an important force for promoting regional economic growth and industrial structure upgrade. However, due to many small businesses lacking of credit assets and collateral, financial information opaque, and weak management, they generally face with difficulties in financing. So there is a big demand for financial services. Although, to some extent, Small and medium enterprises can rely on private financing and other non-formal financial channels to ease financing problems, the role of financial support for SMEs from regional non-governmental non-formal financial institutions is limited. In order to get rid of Macmillan Gap, many innovative financing models emerge. Now the novel financing model, Cluster Financing, from Bangladesh has attracted the attention of many scholars widely.In this paper, based on the research results at home and abroad and the current financing practices, biggest problem impeding SME financing lies in the contradiction between the higher their risk of SMEs and financial institutions sound business demand. Compared to the free outer decentralized management of individual enterprises, industrial clusters form a platform for SMEs mutualistic symbiosis, and the social capital from cluster provides credit enhancement tool for corporate financing. First, this paper constructs a conceptual model of financing SMEs clusters based on social capital. Second, by using of repeated game, we analyze the impact of reputation mechanism for the formation and accumulation of social capital. Third, we further research the impact of the effect of social capital on a cluster of corporate finance. At last, based on the case of credit community in Zaozhuang City, Shandong Province, we study of the correlation between social capital and clusters of SME financing. In particular, we draw three main conclusions of the research process:The formation of social capital is a long process, and it mainly depends on trust, social networks, and social norms. The three mechanisms embed cluster network, and strengthen cooperation between the cluster enterprises.As the core mechanism of social capital, social networks accelerated speed of information dissemination. It can improve the level of transparency of information, meanwhile effectively reduce the asymmetry of information between banks and enterprises. In order to maintain the need of their own social capital, the main economic activity will restrain their lending practices.The impact of social capital on cluster financing is multifaceted. For the corporate being lack of collateral, social capital can play the role of soft security, and solves the financing problems of SMEs. To explore innovative financing model, we must pay attention to the environment of the cluster existing.